And despite efforts to tighten lending and to address problems in the lending culture, the ABC's Four Corners program has learnt bank staff and mortgage brokers are still required to meet tough lending targets and some staff are threatened with dismissal if they do not meet the banks' requirement to sign up more mortgages.

The problems in the lending culture were acknowledged by the banks themselves earlier this year in a review conducted by the former public service chief, Stephen Sedgwick.

Incentive payments and lending targets are still a primary motivator for bank staff.

Internal performance expectations for Westpac bank lenders, obtained by Four Corners, include targets of six-to-nine home-finance requests a week and between two and three home-loan drawdowns a week.

All the big banks have performance targets.

ANZ chief concedes need for further reform

Most bank CEOs, including Westpac, were unavailable for interview but ANZ chief Shayne Elliott did agree to talk to Four Corners.

Mr Elliott said changes had been made and not all the targets were simply sales targets.

Mr Elliott said, following the Sedgewick review, 70 per cent of ANZ's targets were weighted towards good customer outcomes and customer satisfaction.

"[The targets are] not all about sales, not about the number of mortgages," he said.

Banking regulators have also moved to tighten lending, forcing banks to make investor loans in particular harder to get — but bank staff told Four Corners they still had to meet tough performance targets.

Four Corners has obtained letters written to bank staff by branch managers at NAB and Bankwest — owned by the Commonwealth Bank.

The letters warned staff who had not met their targets that their positions were under review, and canvassed the possibility of termination.

In a statement, the NAB said: "As part of regular reviews, staff are assessed based on a mix of financial and non-financial objectives.

"Product sales is but one of these measures. The others include living NAB's values and delivering the right outcomes for customers."

'Massive affordability problem' will exacerbate downturn

Gerard Minack, the former head of developed market strategy at Morgan Stanley, said Australia had been led down this path by current tax arrangements and lenders who had been increasingly willing to leverage up borrowers.

This, he said, had created "a massive affordability problem" that will exacerbate the pain associated with any downturn.